Ultratech Cement Limited · NSE:ULTRACEMCO
Ultratech Cement — Q2 FY21 Earnings Presentation
34 slides from Ultratech Cement's earnings presentation, Oct 21, 2020
Slide 1: India's Largest Cement Company: Earnings Q2 FY21
INDIA’S LARGEST CEMENT COMPANY Earnings: Q2 FY21 21st October 2020 Stock code: BSE: 532538 | NSE: ULTRACEMCO | Reuters: UTCL.NS | Bloomberg: UTCEM IS/UTCEM LX
Slide 2: Contents
ESG at Macro Key Performance UltraTech and updates CONTENTS Industry and updates highlights 1 2 3 4 GLOSSARY: MNT – Million Metric Tons, LMT – Lakh Metric Tons, MTPA – Million Tons Per Annum, MW – Mega Watts, Q1 – April-June, Q2 – July-September, Q3 – October-December, Q4 – January-March, CY – Curre
Slide 3: UltraTech Cement announces joining '2050 Climate Ambition'
UltraTech Cement announces joining '2050 Climate Ambition' Global announcement on 1st September 2020 UltraTech is the founding GCCA members commit to continue to drive down member of GCCA the CO2 footprint of their operations and aspire to deliver society with carbon neutral concrete by 2050. GCCA w
Slide 4: UltraTech products deliver carbon emissions savings through critical infrastructure projects
UltraTech products deliver carbon emissions savings through critical Infrastructure projects Bandra Worli Sea Link (BWSL) is one classic example of critical infrastructure that reduces the environment impact through decongestion. The project will benefit the society by carbon emission savings of app
Slide 5: UltraTech creating positive impact
UltraTech creating positive impact 464 Office Equivalent to electricity savings tCO2 ~145 cars put off road Office commute 583 tCO2 Equivalent to ~182 cars savings put off road Rail Transportation 1.25 mn saving tCO2 CO2 estimated for Mumbai office based on period between March to September 2020 Ult
Slide 6: UltraTech creating positive impact (Contd…)
UltraTech creating positive impact (Contd…) Reduction in Water 6.3 Million liters Equivalent to approx.5 consumption of water Olympic size swimming pool Reduction in 8 Tons of Saved approx. paper usage paper 136 trees CO2 estimated for Mumbai office based on period between March to September 2020 Ul
Slide 7: Climate advocacy
Climate advocacy Joined the list of proactive UltraTech joined the SBTi Incubator companies in the Carbon Market launched by CDP and WWF India Simulation project initiated by WRI India Accelerate the adoption of SBTi target Learnings from the project to be used to build capacity amongst Assist in be
Slide 8: Project Jagruti 2.0: Sustainability awareness amongst employees
Project Jagruti 2.0: Sustainability awareness amongst employees 3300+ 55 Jagruti 2.0 was Learning index for Plan to cover 100% launched on these sessions of manufacturing 10th July 2020 have been 76% employees this year Ultra Tech Cement Limited 8
Slide 9: UltraTech shines at the CII National Awards for Energy Management
UltraTech shines at the CII National Awards for Energy Management Six manufacturing units recognized for ‘energy efficiency’ UltraTech Cement Limited, has been recognized with seven awards at the 21st National Energy Award for Excellence in Energy Management 2020’ conferred by Confederation of India
Slide 10: UltraTech Concrete shines at the OSH & Fire Safety and NSCI Safety Awards
UltraTech Concrete shines at the OSH & Fire Safety and NSCI Safety Awards UltraTech RMC won 5 prestigious awards at the Safety awards night by National Safety Council of India (NSCI). Unit Award UltraTech RMC , Kelambakkam, Kanchipuram Chennai Gold Trophy UltraTech RMC , Medchal, Hyderabad Bronze Tr
Slide 11: ESG at UltraTech
ESG at UltraTech Sustainability at UltraTech Education People benefited: 1.6 million Education for: 0.1 million children Social Healthcare Change CSR at Rural Health Camps for: 0.2 million people UltraTech Villages Covered: 502 Infrastructure Sustainability Development Livelihood Program coverage: 1
Slide 12: UltraTech's R4 strategy to manage Covid-19
UltraTech’s R4 strategy to manage Covid-19 A safe exit strategy from the lockdown by formulating robust SOPs Response to control the virus spread Leveraged technology to stay connected with each other and to keep abreast of the market conditions Relief Extended full support to our supply chain partn
Slide 13: ESG at UltraTech: COVID-19 counter-measures
COVID-19 counter-measures: ~ 1.0 mn population outreach Continuous and pro-active awareness camps ESG at across villages for social distancing methods UltraTech Training for agriculture, non-farm livelihood and were virtual and reached out to 1874 farmers Training and learning sessions for alt
Slide 14: Contribution to Society
Contribution to Society With a focus on Mother & Child Health Care – 4371 families were supported through immunisation and food kits and health camps ESG at UltraTech Continuous and pro-active awareness camps across villages and reinforce prevention message as well as social distancing. To ens
Slide 15: Macro and Industry updates
Gradual resumption of business Early estimates for GDP for Q2 indicate a sharp recovery from the degrowth of 23.9% during Q1 IIP growth contracted at a slower pace of Macro and (-) 8% for Aug’20 Industry updates Cement demand rebound in September, with most regions reporting YoY growth Pic
Slide 16: Sectoral Update Q2 FY21
Sectoral Update Q2 FY21 State/Region wise performance Vol. State/Region I R H C Key drivers Gr. Robust IHB demand North Infrastructure segment registered positive growth Robust IHB demand Central Infrastructure segment registered positive growth Rural housing witnessed positive demand Maha
Slide 17: Q2 FY21: Key Performance Highlights
Q2 FY21 : Key Performance Highlights Q Effective Volume Growth 20% Operating EBITDA per Ton 19.21 1387 16.03 1069 Q2 FY20 Q2 FY21 Q2 FY20 Q2 FY21 Operating Margin % PAT (Rs crores) 27% 1222 21% 612 Q2 FY20 Q2 FY21 Q2 FY20 Q2 FY21 UltraTech Brand sales grew 15% Ultra Tech Cement Limited 17 previous p
Slide 18: Cost efficiency and synergy gains on track
Capacity Pet coke usage Variable Costs utilization in ~74% reduction Sep’20 ~68% (Q1FY21 : 73%) ~12% YoY Century Cement: 1st year of Operations under UltraTech WHRS Brand Transition implementation Achieved to complete the work started, EBITDA of transition by this will result into further cost > Rs
Slide 19: UltraTech Nathdwara Continues Stellar performance
China asset Capital divestment Disposal of employed other non- core proceeds reduced received assets in ~ Rs 750 crs process UltraTech Nathdwara Operating at Production cost Continuously ~60% capacity reduction: achieving utilization >17% YoY EBITDA of >Rs 1500/mt Continues Stellar performance Ultra
Slide 20: Reduction in Net Debt
Reduction in Net Debt Consolidated Net Debt (Rs crores) Effective Working Capital Management : Q2 release : Rs 297 crores 16860 Capex Spends : 14651 Rs 286 crores 12132 Net Debt Reduction in Q2 : Rs 2519 crores Consolidated Net Deb/EBITDA reduced : Mar'20 Jun'20 Sep'20 1.22x v/s 1.70x in Mar
Slide 21: Sales Performance: Q2 FY21
Sales Performance: Q2 FY21 MnT Q2 FY21 H1 FY21 Particulars CY LY % CY LY % Domestic Sales 18.52 15.45 20 32.08 32.71 (2) (basis effective period) Domestic Sales (basis restated 18.52 17.19* 8 32.08 37.07* (13) prior periods) Exports and Others 0.69 0.57 20 1.07 1.18 (9) Total India Operations 19.21
Slide 22: Volume Growth Trends
Volume Growth Trends … Century Assets effective date of merger : 1/10/2019 20% 10% 8% 24.56* -4% -4% 20.78 * 3.26 20.48 * 2.61 21.30 2.62 17.77 * -16% -22% 1.74 19.21 20.52 -32% 20.00 13.94 16.03 18.17 17.86 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 UltraTech Total Volume (Mnt)
Slide 23: Key Performance Drivers: Q2 FY21
Key Performance Drivers : Q2 FY21 Increased sales Rural markets Trade sales share Blended sales at network 4.5%, penetration up 3% YoY 71% up 3% YoY most of it increased by appointed ~5% YoY digitally More products Improved clinker Number of UBS introduced in to cement Fixed Cost down outlets: ~2300
Slide 24: Operating Costs: Q2 FY21
Operating Costs : Q2 FY21 LOGISTICS COST ENERGY COST RAW MATERIAL COST 33% 27% 15% Increased YoY 1% to Rs. 1140/t Declined YoY 9% to Rs. 937/t Increased YoY 3% to Rs. 505/t • Diesel Price Hike • Lower pet coke prices • Higher Flyash prices • Geomix optimization and • Increased share of Green Power •
Slide 25: Logistics Cost Trends
Logistics Cost Trends Logistics cost (Rs./t) YoY cost increased: 1% 1% 1140 Diesel Price higher by ~14% 1128 Savings on sourcing realignment, Geomix optimization 1116 Improved clinker to cement conversion ratio Q2FY20 Q1FY21 Q2FY21 Logistics costs v/s Diesel Price Index QoQ cost increased: 2%
Slide 26: Energy Cost Trends
Energy Cost Trends Energy cost (Rs./t) YoY cost reduced : 9% Pet coke consumption rate at $71/t; 1026 22% lower over last year 913 9% 937 Pet coke usage at 75% (LY: 64%) ‘Green power’ share in power mix raised to 13% (LY: 9%) Q2FY20 Q1FY21 Q2FY21 QoQ cost increased : 3% Energy cost v/s Pet cok
Slide 27: Raw Materials Cost
Raw Materials Cost Raw Materials Cost (Rs./t) YoY cost increased : 3% 3% 505 Higher flyash prices ~ 3% 491 Higher blended mix (71% vs 68%) 477 Q2FY20 Q1FY21 Q2FY21 QoQ cost increased : 6% Conversion ratio and Fly ash Prices (Index) Trends Higher flyash prices ~ 8% 112 108 103 Lower conversio
Slide 28: Other Costs Trends
Other Costs Trends Other costs (Rs./t) YoY cost decreased : 18% 785 641 Higher volume – 8% 575 18% Lower fixed cost Q2FY20 Q1FY21 Q2FY21 QoQ cost increased : 11% PP Granules Price (Index) Trend Higher costs during the maintenance quarter 108 100 Packing cost increased ~ 4% 94 87 Q1 18 Q2 20
Slide 29: Q2 FY21 Performance - P&L
Q2 FY21 Performance - P&L Rs. crores UTCL Standalone Published India Operations Particulars CY LY % CY LY % Revenues (Net of Taxes) 9895 9123 ^ 8 9861 9092 ^ 8 Operating Income 124 141 (12) 143 141 2 Other Income 146 182 (19) 127 159 (20) Total Income 10165 9446 8 10131 9393 8 Expenses : Raw Mater
Slide 30: Income Statement: Q2 FY21
Income Statement : Q2 FY21 Rs. crores Consolidated India Operations Particulars CY LY % CY LY % 10231 9486 8 Revenues (net of taxes) 9861 9092 8 2830 2065 37 EBITDA 2784 2059 35 28% 22% 6 Margin (%) 28% 23% 5 357 507 30 Finance costs 348 494 30 672 668 (1) Depreciation & Amortization 645 641 (1) 1
Slide 31: EBITDA PMT Trends
EBITDA PMT Trends 1651 1478 198 1449 65 70 1262 1251^ 1453 1159 1122 103 82 1036 1051 1090^ 89 131 926 71 98 98 1387 57 1413 1159 1169 939 990 953 869 1069 1019 FY16 FY17 FY18 FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 FY20 Q1FY21 Q2FY21 Operating Profit Other Income Total EBITDA 7% CAGR over FY16 Ultra Tech
Slide 32: Financial Position: Key elements
Financial Position: Key elements Rs. crores Consolidated India Operations Particulars 30.09.2020 31.03.2020 30.09.2020 31.03.2020 52727 53523 Net Fixed Assets incl. CWIP 51069 51748 (708) 531 Net Operating Working Capital (1049) 87 40757 39123 Shareholders Fund 40173 38533 22556 22898 Total Debt 209
Slide 33: Key Financial Ratio Trends: India Operations
Key Financial Ratio Trends : India Operations Rs. crores Particulars FY16 FY17 FY18 FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 FY20 Q1FY21 Q2FY21 EBITDA Margin (%) 22% 24% 22% 19% 28% 23% 21% 25% 24% 32% 28% ROCE (%) 12.3% 13.4% 9.9% 9.0% 10.5% 11.0% 11.6% 11.5% 11.5% 10.1% 11.1% ROE (%) 11.5% 11.5% 8.9% 7.2%
Slide 34: Disclaimer
Disclaimer Statements in this ‘presentation’ describing the Company’s objectives, estimates, expectations or predictions may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Impor